What is Compensatory Time?

Sometimes an employer will ask you to work extra hours, or mandatory overtime. In exchange, the employer might give you time off in the future instead of paying you for overtime. This time off is called compensatory time.

If I Have Worked Overtime, Is My Employer Allowed to Give Me Compensatory Time Instead of Overtime Pay?

Generally, the answer is no. Federal law requires that all employees on an hourly wage must be compensated for overtime work (i.e., more than 40 hours a week under federal law) by being paid 150% of their regular wage per overtime hour. While it is not considered legal in the private sector, employees working for the federal and state governments are allowed to receive compensatory time in certain circumstances. If you are a federal or state employee, consult your employee handbook or talk to your manager to find out what those circumstances are.

Can an Employer Ever Give Me Compensatory Time Instead of Overtime Pay?

An employer may rearrange the employee's work schedule during a pay period to provide compensatory time off instead of overtime pay. The employer may do this only if:

The compensatory time is taken during the same pay period as the overtime work; and

The employee is compensated for the lost overtime premium by being given an hour and a half off for every hour of overtime worked.

Are There Any Exemptions To Compensatory Time?

In federal law, compensatory time is governed by the Fair Labor Standards Act (FLSA). The act recognizes two types of workers: salaried and hourly. Hourly workers must be paid for any overtime. Salaried employees, on the other hand, are exempt from many of the regulations of the FLSA, including the regulations regarding overtime payment. Under federal law, salaried employees may be given compensatory time instead of overtime. Other federal law exemptions, like exemptions for farmers or health care workers, may also apply.

Do States Have Any Regulations on Compensatory Time?

States may have their own regulations regarding compensatory time and these regulations will differ from state to state. For example, California requires that the employee must consent in writing to the use of compensatory time prior to working the overtime. The employee must also be considered a full-time worker, forty hours a week, and must be given compensatory time at the same rate as federal overtime pay, or same amount of overtime worked plus a half.

Can My Employer Make Me Use My Compensatory Time?

The Federal Supreme Court has ruled that federal law does not prohibit employers from forcing employees to use compensatory time. Federal law also doesn’t prohibit employers from setting expiration dates for compensatory time usage. However, many states have laws forbidding employers from compelling compensatory time usage.

What Happens If I Am Terminated Before I Can Use My Compensatory Time?

If an employee was terminated before he or she could use all of their compensatory time, the compensatory time remaining is typically converted into overtime pay for the employee’s last payment.

What Should I Do if My Employer Illegally Gave Me Compensatory Time?

Wage laws can be complicated and vary from state to state. An experienced employment attorney can help you determine whether you were entitled to overtime pay. An employment attorney can also help you file the necessary paperwork and represent you in court.